Housing market misery to continue?

gooram said:
This is pretty sensational Ausprop. Such emotive language reminds me of The West Australian or A Current Affair. Prices falling 1 or 2% on such a small minority of sales in Perth does not constitute a 'big bust', or 'agonising grind'.
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I think it is an agonising grind for several reasons:

- the 1 or 2% is a lot in such a short time frame and seems to be happening consistently
- there seems to be momentum for it to continue
- it comes on top of some rather dramatic falls (indeed if the sydney market had performed like this it would be generally accepted that Steven Keen was an economic prophet)
- whilst a lot of median price stock has not been disastrous, I can point to many real sales that show some areas have dropped 25 to 40 to 50% since the peak, including mandurah, beachside locations, blue chip areas such as swanbourne and subiaco and floreat

the reason why it is all calm out there is that the bottom end stock, the stuff the battlers own, is somewhat unchanged. as this fills the bulk of the median price calculation the stats aren't reflecting a calamity. having said that my mandurah units are off 25% and fallign and presumably a lot of that stock is owned by battlers too. I took a $500k haircut on my PPOR... it's a big chunk of change. looking at listings thru subiaco and claremont I am not regreting the sale

is it a good time to buy - yes it is a good time to get some exposure if your portfolio has limited property exposure and you have the cashflow to wait this thing out. hey it will come back, one day, just don't expect it in january! and if your aren't structured correctly your cashflow will erode the gains anyway
 
sammmeee said:
I love articles like that. The more doom and gloom the better. Sellers believe it and are ready for low offers. Bring on the scare campaign!

What I don't understand is why people are selling now? I get the forced sales and change of circumstances... Why would investors want to sell when there is blood in the market.
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Totally bloody agree!!! :) Bring on the bloodbath, I'm cashed up and ready to enter again!!!

Holding costs will certainly be high and rising however, so I'm not going to pay market value or anywhere near it if I am to purchase. I am going to play a game and see if I can find a vendor who will accept 100k below market value just for the hell of it. It seems there has never been so much fear in the market as there is right now.
 
Perth is positioned to inc in wages soon, and is looking good compared to other states. Rents are poor now, but I wouldn't be surprised if we had 10% increases next year. Immigration following the $$$. There is a big push to keep house prices down. I don't think Perth is going to crash, but will be steady for a while.
 
recruit2 said:
Totally bloody agree!!! :) Bring on the bloodbath, I'm cashed up and ready to enter again!!!

Holding costs will certainly be high and rising however, so I'm not going to pay market value or anywhere near it if I am to purchase. I am going to play a game and see if I can find a vendor who will accept 100k below market value just for the hell of it. It seems there has never been so much fear in the market as there is right now.
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+2 , I have sold all my direct property holdings in the last couple of years as the current yields don't stack up when there are plenty of alternative investments opportunities with potential for growth and reasonable yield at the same time.

Would love to buy some more property again but won't be interested unless I can get 30% discount on current prices. If I can get that, great, if I can't thats fine too as I don't need it.
 
whatever123 said:
+2 , I have sold all my direct property holdings in the last couple of years as the current yields don't stack up when there are plenty of alternative investments opportunities with potential for growth and reasonable yield at the same time.

Would love to buy some more property again but won't be interested unless I can get 30% discount on current prices. If I can get that, great, if I can't thats fine too as I don't need it.
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Are you sure you were invested in property? Them bolded words are bear statements. :eek: :D
 
csc2 said:
there is no magic wand no matter what people think...the cycle has turned and it wont be reversing for some time in many areas..
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oh don't be ridiculous csc2, it's not 1 market, all our capitals are on different cycles and we have markets within markets and house prices always double every 7 years and yields don't matter because it's always made up by capital growth and we won't see a crash because the economy is booming and we won't see foreign lenders pull their capital from Australian banks because there is a commodities boom around the corner and we won't go into recession because China is going to boom for another 15 years.....puff puff, did I cover everything?
 
On a side note.

My property manager/agent currently has 500 rentals on there books.
...Zero available for rent.......
Story is similar all over the place. Workers trying to get into town but cant move here until they find a rental.People paying 12 months in advance just to secure a place.
This is just a regional centre. Not a mining town.
I personally expect prices to track sideways or drop a little for some time yet. But with the above happening a significant drop seems unlikely. Many locations Australia wide are in the same situation.
But there are others that are not so tight and with inflated prices.
You know. markets within markets and all that jazz.:p
 
Samwise said:
Been looking at houses lately... there are buyers out there but they are being more picky. The good stuff still gets snapped up but the dross stays around for ages it seems.

Utterly failed to buy a place last week, got purchased with cash after first home open (for which there was a queue). This was a $1.1m place

An agent told me (yeah, what do they know :rolleyes:) that the magic number of listed properties in Perth is 12,000. Less than this, its a sellers market, more than this, buyers market, equal to this, neither. At the moment there are 16,000 properties listed.
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They've been quoting 12,000 for years, with the ongoing increase in population shouldn't they be raising that number, even if just to achieve status quo?
 
You think that's a lot , just remember what I mentioned a few mths back about QLD and save up some dosh , it's going to be huge .
Take advantage of the many terms that will be offered in two yrs time or so , get a free holiday while your at it , sit tight and end up a very , very rich man .
15 yrs , if you have that time frame , that'll be the place to shop !

Cheers

Oh , God I hope some boring B'd isn't checking my punctuation again , yawn !
 
Samwise said:
^

Maybe... but then 16000/12000 is 133% - you think the population in Perth has increased 33%?

Just a thought
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You are talking about a second order movement v a first order though.

i.e. total stock may increase by 2% one year and then 4% the next, this is represented as a 100% increase in the increase in stock but still only a 4% increase in stock.

Nonetheless something is happening to total demand when this many properties are for sale in nearly all our capital cities. As we have seen over the last 10 years only small changes in total demand can have a large influence on price as supply in terms of total stock is very slow to catch up.
 
i find it funny that 20,000 listing are on the market.

how many are there for 3 months +?

how many are new?

where are these people selling going to go?
 
good questions BC - are they upgraders, downsizers, lifestylers, potential renters? or are they all moving to karratha and newman :)
 
Investors need to have a long term view when entering the property market. Therefore, it is generally a set and forget strategy. The only reason one needs to look at selling is if the property is difficult to maintain of there is some possible down turn due to local factors such as a new freeway going in in your back yard.

Over time this asset can be used to buy other properties and this is how you grow a portfolio. Then in 20 years you can look back and marvel at the wonder of compounding.

A lot of us tend to look at the bouncing ball and try an interpret things that will mean little over the long term. As an example, if you study the Brisbane market you will see there was nil to negative growth between 1990 and 2000. A lot of people sold and got out of property however those that maintained faith and added to their portfolios will be sitting pretty. Over time all properties become cash flow positive so minor downturns are not as upsetting.

The lesson here is to stay focused on the big picture.
 
Sailesh Channan said:
Investors need to have a long term view when entering the property market. Therefore, it is generally a set and forget strategy. The only reason one needs to look at selling is if the property is difficult to maintain of there is some possible down turn due to local factors such as a new freeway going in in your back yard.

Over time this asset can be used to buy other properties and this is how you grow a portfolio. Then in 20 years you can look back and marvel at the wonder of compounding.

A lot of us tend to look at the bouncing ball and try an interpret things that will mean little over the long term. As an example, if you study the Brisbane market you will see there was nil to negative growth between 1990 and 2000. A lot of people sold and got out of property however those that maintained faith and added to their portfolios will be sitting pretty. Over time all properties become cash flow positive so minor downturns are not as upsetting.

The lesson here is to stay focused on the big picture.
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i read recently (sorry no reference, just hearsay) that the average PI holds a property for 5 years, and just one. they get pee'd off at the lack of riches in 5 years and sells. so if prices do start to drop the average PI will want out. not everyone researches and visits places like this.
 
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